By Tiernan Ray

Following Verizon Communications‘s (VZ) Q4 report this morning, in which the carrier made no explicit mention of its sales of Apple’s (AAPL) iPhone, the Street is taking a crack at guestimating what the iPhone implications are.

Apple is to report fiscal Q1 results next Monday, January 27th, after the closing bell.

Wells Fargo’s Maynard Um, who has a Market Perform rating on Apple stock, writes that while he doesn’t know the number, his estimate for Apple’s total sales in the quarter imply iPhone being 51% of activations:

While VZ didn’t break out iPhone activations, it noted there were fewer smartphone upgrades this year due to some of the policy changes it implemented and also because last year benefitted from iPhones becoming free for the first time on its network. iPhones would have to account for 51% of the smartphone activations in Q4 to meet our 4.5MM iPhones estimate for VZ, which is about 8.2% of our 54.8MM total iPhone estimate (below the eight quarter average of 11.3%). Every 1MM in iPhone unit shipments equates to about $0.22 in EPS, all else equal.

Overall, Um thinks that “smartphone penetration” is on the rise at networks and that as a consequence “there are early signs of a balance of power shift back toward operators from handset vendors, which may put more of a focus on emerging and international markets.”

Cantor Fitzgerald’s Brian White, who has a Buy rating on Apple, and a $777 price target, also notes what appears to be a sub-seasonal trend in smartphone activations:

Verizon highlighted smartphone activations of 8.8 million in 4Q:13 compared to 7.6 million in 3Q:13, which equates to approximately 16% QoQ growth. This performance compares to average December quarter sequential smartphone activation growth of approximately 41% QoQ over the past two years. In 3Q:13, Apple’s iPhone represented 51% of smartphone activations at Verizon and historically the carrier has provided commentary around iPhone units (either directly or indirectly); however, we did not hear any comments around the iPhone on today’s call. Over the past 10 quarters, Verizon has accounted for approximately 11% of Apple’s total quarterly iPhone unit sales.

White is enthusiastic, however, about implications for the iPad from strong tablet results that Verizon noted:

Regarding tablets, Verizon sounded very pleased with demand in this category and indicated 4Q:13 was “our best quarter of tablet activations since they were first introduced in late 2010.” Verizon activated approximately 790,000 post-paid tablets in 4Q:13 and approximately 42% of the 1.9 million total post-paid tablets activated in 2013. This 4Q:13 percentage is much higher than we are modeling for Apple’s iPad as a percentage of our 2013 forecast. Given Apple’s leading market share in the tablet category and strong new iPad portfolio, we believe this could indicate potential upside to our iPad forecast for the December quarter.

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There are 7 comments

JANUARY 21, 2014 1:54 P.M.

KevK wrote:

Or you could do what I did. I was paying Verizon $47 a month for my Motorola RazR from about eight years ago. Well, the back fell off a few months ago and I've been searching for reasonably priced cell phone service and settled on getting an iPhone from Consumer Cellular for a grand total of $250 upfront for a 32 GB iPhone 5s, plus $25 a month for about two years plus $13 a month for basic service. So for less the the cost of my phone only service from Verizon I have a smart phone with very limited service. But I use my phone very lightly and in the end I'm saving a lot of money. Consumer Cellular uses the ATT network which has better coverage than Verizon at my house so that was an added benefit.

JANUARY 21, 2014 2:00 P.M.

Ed wrote:

Doesn't matter. If they were good, the analysts would put a negative spin on it and drive the stock price down. I'm glad Apple is keeping them in the dark. Every Bit of good news from Apple is being flushed

JANUARY 21, 2014 2:27 P.M.

rottenbittenfruit wrote:

Tim Cook is simply not capable of running Apple in an effective manner. Apple has far too much unused cash reserve going to waste by just sitting in a bank making almost no interest at all. You can't expand a company with that kind of thinking. What investor wants to put money in a company earning interest from a bank. An investor could put his own money in a bank and earn interest. $150 billion is an absolutely huge amount of money to do absolutely nothing with.

Tim Cook needs to change Wall Street's perception that the company has stagnated. Apple could easily start a cloud service business like other companies are doing to bring in extra revenue. Apple could easily afford to build a few enterprise-based data centers and staff them with qualified employees rather than have Wall Street simply say Apple is a dead-end investment. It just doesn't make any sense to me why Apple keeps holding back and being constantly disrespected as a company. It's only Apple shareholders that have to pay the price. What's Tim Cook's excuse going to be for missed earnings this time around? There's simply no reason at all for Apple to go down like that.

JANUARY 21, 2014 2:45 P.M.

Rotten wrote:

Cook has had long enough to grow the business. Instead of burning the cash or watching it do nothing, Cook should have bought Twitter, Bidu, Yahoo, Netflix or Priceline. He didn't and he has failed. A 800 stock sitting at 540 answers all questions.

JANUARY 21, 2014 2:50 P.M.

Dennis wrote:

to rottenbittenfruit: don't let Wall Street's projections blind you to what's really going own at Apple. Mr. Cook is doing a very good Job running Apple. Don't let Wall Street distract you with this cry about the extra $150B that Apple has lying around. Let the people that are running the company run the company. If you bought Apple because you thought it was a good investment then keep that premise and let those that were smart enough to accumulate $150B keep doing what they are doing. Does it really make sense that the team that was/is smart enough to turn Apple into a cash cow would not have a long term plan for all that cash? Investors have the attention span of children at times. Let the grown ups do what they are being paid to do.

JANUARY 21, 2014 3:00 P.M.

MacPro wrote:

If this was Apple's results, they would have quickly pointed out that This year's iphone activations were down by 1 million compared to a year ago. Interesting how they are comparing prior quarter to current quarter.....Feeling confident that Apple meets or beats but just interesting how they break out the microscope when Apple reports verses checking to see if the company beat on the top and bottom. I do believe that Google is going to miss if not this quarter very soon. We already know that Samsung came up short!

JANUARY 21, 2014 4:25 P.M.

Anonymous wrote:

Re SAMSUNG. LOL. People who were impressed were kidding themselves. As for Google: Everything they use to impress with is so far away. And unlike Google, Apple keeps a lid on their stuff until they're ready.

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.